Testimony on the Federal Government’s Responsibilities and Liabilities Under the Nuclear Waste Policy Act
Kim Cawley, Chief of CBO’s Natural and Physical Resources Cost Estimates Unit, testifies on the Nuclear Waste Policy Act before the Subcommittee on Environment and the Economy, Committee on Energy and Commerce, U.S. House of Representatives.
This testimony provides updated information about the federal government’s responsibilities and liabilities under the Nuclear Waste Policy Act of 1982 (NWPA) and the status and budgetary treatment of the Nuclear Waste Fund. The testimony makes the following key points:
- Since 2010, the Administration has taken a variety of actions to terminate a project to build a geologic repository for nuclear waste at Yucca Mountain in Nevada—the only site where such waste is authorized to be stored under current law. Although agencies have continued activities related to licensing that facility, the Congress has since provided no new funding to the Department of Energy (DOE) to build it.
- Largely in response to such actions, the National Association of Regulatory Utility Commissioners and the Nuclear Energy Institute filed petitions with the U.S. Court of Appeals for the District of Columbia Circuit to end the federal government’s collection of fees paid by nuclear power generators to cover the cost of disposing of civilian nuclear waste.
- In November 2013, that court effectively ordered DOE to suspend collection of annual fees from nuclear power generators. The court found that in DOE’s most recent assessment of the adequacy of the fees to cover the lifetime costs of disposal, the department had failed to provide a legally justifiable basis for continuing to collect fees in the absence of an identifiable strategy for waste management. In May 2014, pursuant to the court’s order, DOE stopped collecting disposal fees, which had previously totaled roughly $750 million per year.
- DOE is more than 17 years behind schedule in its contractual obligations to remove and dispose of civilian nuclear waste, and it has already incurred significant liabilities for damages related to its partial breach of contracts with electric utilities.2 The federal government has already paid $5.3 billion in damages to electric utilities, and DOE estimates that its remaining liabilities will total $23.7 billion if legislation and sufficient appropriations are enacted that will enable it to begin to accept waste within the next 10 years. However, if the department’s schedule is further delayed, the anticipated costs—which will be borne by taxpayers through spending from the Department of the Treasury’s Judgment Fund—will climb.
- DOE is not currently receiving any appropriations to construct facilities for the geologic disposal of nuclear waste. But disposing of civilian nuclear waste will cost a substantial amount over many decades regardless of how the government meets that responsibility. Providing annual appropriations for disposal-related activities in the future would intensify competition for such funding, which, through fiscal year 2021, is subject to caps specified in the Budget Control Act of 2011 as amended by subsequent legislation.
- Because the federal budget records most income on a cash basis, the fees that utilities have already paid have been credited as offsets to federal spending in the years in which they were collected and thus helped to reduce deficits in those years. As a result, although such fees were authorized to be used for nuclear waste disposal, the unexpended balances of those fees cannot offset future appropriations for such activities in estimates of the budgetary effects of those appropriations.
- The amount of nuclear waste that has been generated already exceeds the statutory limit on the volume of waste that can be disposed of in the repository currently authorized by the Nuclear Waste Policy Act. Even if a repository is built at Yucca Mountain, a change in law will ultimately be required to authorize DOE to permanently dispose of all of the waste anticipated to be generated by existing nuclear power plants. Without such a change and without steps that will allow DOE to fulfill its contractual responsibilities to dispose of waste, taxpayers will continue to pay utilities—through settlements and claims awards—to keep storing substantial amounts of waste.